U.S. oil prices could sink to $50 a barrel at some point over the next two years, according to analysts at Bank of America Merrill Lynch.

But don't expect a corresponding drop in gas prices.

Merrill analysts expect U.S. oil prices to still average about $90 a barrel over the same time period. Global oil prices meanwhile, which more closely dictate the price of gasoline in the United States, are expected to remain high as growth in global oil supplies lags population growth and economic output.

The drop in U.S. oil prices would likely be temporary, caused by the difficulty in moving huge amounts of new oil from places like North Dakota's Bakken shale or Texas' Eagle Ford to market. Already, all the new production has led to a glut of oil in the region.

"No one expected output to grow by a million barrels per day last year," Francisco Blanche, Merrill's head of commodity research, said at a press briefing in New York. "No one."

At the risks of being accused of being a liberal: And Americans subsidize cheap oil exports elsewhere. IHMO, that’s really where this is heading. We’re going to pay high prices here for gas while the crude gets exported offshore. Question is, who is profiting (look at the investments of Congress and the White House)

Not as long as China is willing to pay $100/bbl and has plenty of dollars to spend. Come to think of it, we have plenty of dollars to spend as well considering that we keep printing up new ones at a rate of $4 billion per day.

17
posted on 12/12/2012 5:16:19 AM PST
by Hoodat
("As for God, His way is perfect" - Psalm 18:30)

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